# In the matter of Express Publications (Madurai) Private Limited IA(IBC)-861(CHE)-2022 in CP(IB)-369CHE)-2022

> NCLT judgment dated 2022-09-09. Citation: TCN-2022-NCLT-01106. The Corporate Debtor, Sonata Information Technology Limited, filed an application under Section…

- **Court:** NCLT
- **Order date:** 9 Sept 2022
- **Citation:** TCN-2022-NCLT-01106
- **Category:** IBC
- **Source page:** https://caseease.in/cases/ibc/nclt-division-bench-court-i-chenn/express-publications-madurai-private-limited-iaibc-861che-2022-in-cpib-369che-20-fd0d56de

## Summary

### Background

The Corporate Debtor, Sonata Information Technology Limited, filed an application under Section 8 of the Arbitration and Conciliation Act, 1996, read with Regulation 44 of the Company Law Board Regulations, 1991, seeking a referral to arbitration. The Operational Creditor, Express Publications (Madurai) Private Limited, had initiated Corporate Insolvency Resolution Process (CIRP) under Section 9 of the Insolvency and Bankruptcy Code (IBC). The Corporate Debtor argued that the matter should be referred to arbitration due to an existing arbitration clause in an agreement dated 2020-03-30 between the parties. The Operational Creditor contended that the arbitration clause did not govern the transaction related to the CIRP initiation and that the Corporate Debtor initiated

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## Facts

Express Publications (Madurai) Private Limited, the Operational Creditor, initiated CIRP against Sonata Information Technology Limited, the Corporate Debtor, under Section 9 of the IBC. The Corporate Debtor filed an application under Section 8 of the Arbitration and Conciliation Act, 1996, seeking to refer the matter to arbitration based on an agreement dated 2020-03-30 containing an arbitration clause. The Operational Creditor argued that the arbitration clause did not govern the specific transaction related to the CIRP. The Operational Creditor also contended that the Corporate Debtor initiated arbitration proceedings after receiving a demand notice dated 2021-10-28 under Section 8 of the IBC. The Respondent filed their reply dated 2022-09-04 under SR 5211 on

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## Issues and analysis

### Issue 1: Whether the application filed by the Corporate Debtor under Section 8 of the Arbitration and …

**Ratio:** Section 238 of the IBC has an overriding effect over other laws, including the

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**Reasoning:** The NCLT reasoned that allowing the arbitration clause to override the IBC would defeat

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**Interpretation:** This interpretation clarifies that while arbitration is a valid method of

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**Application:** In this case, the NCLT applied the ratio by holding that the Corporate Debtor's

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## Parties

- **Judges:** BACHU VENKAT…; SAMEER…
- **Appellants:** Express Publicatio…
- **Respondents:** Sonata Information…

## Timeline

- **2020-03-30 — Agreement…**: Agreement entered between the parties…
- **2021-10-28 — Demand Noti…**: Corporate Debtor received the Demand…

## Legal provisions

- [Insolvency and Bankruptcy Code, 2016, Section 9 — Application for initiation of corporate insolvency…](https://caseease.in/legal-provisions/insolvency-and-bankruptcy-code-2016/section-9)

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